November 8, 2015

THERE IS NO HOMO ECONOMICUS:

Obamacare Not as Egalitarian as It Appears (TYLER COWEN, 11/08/15, NY Times)

We can safely say that the policy is costing less than anticipated, perhaps 20 percent less, according to a Congressional Budget Office estimate, and that it has reduced the number of Americans without insurance. But the numbers also suggest that by some measures, the Affordable Care Act has had only a limited impact on economic inequality. In fact, I view the policy as an object lesson in the complexity of reducing the harmful consequences of inequality in the United States.

The act has many parts, but let's focus on the mandate, a core feature that requires those without insurance to buy it. It was intended to help millions of Americans who did not have health care coverage. Under the program, government subsidies are available for the needy, and there is clear evidence that the poorest people, who receive the largest subsidies, are better off under the health reform law.

In that sense, the program has been a success. But whether other individuals subject to the insurance mandate -- those who qualify for lower subsidies or for none at all -- are also better off is much harder to say, some recent research has found.

Of course, this question may seem simple if you consider health care coverage to be an essential component of a good human life, and perhaps of social justice as well. If you begin with those assumptions, you might conclude that when you require people to buy insurance coverage you are improving their lives -- even if they are not willing to pay for the insurance without prompting from the government.

But there is another way of looking at it, one used in traditional economics, which focuses on how much people are willing to pay as an indication of their real preferences. Using this measure, if everyone covered by the insurance mandate were to buy health insurance as the law dictated, more than half of them would be worse off.

This may seem startling. But in an economic study, researchers measured such preferences by looking at data known as market demand curves. Practically speaking, these demand curves implied that individuals would rather take some risk with their health -- and spend their money on other things -- partly because they knew that even without insurance they still would receive some health care. These were the findings of a provocative National Bureau of Economic Research working paper, "The Price of Responsibility: The Impact of Health Reform on Non-Poor Uninsureds" by Mark Pauly, Adam Leive, and Scott Harrington; the authors are at the Wharton School at the University of Pennsylvania.

Majority still supports single-payer option, poll finds (Sarah Ferris, 01/19/15, The Hill)

More than five years after the single-payer system was scrapped from ObamaCare policy debates, just over 50 percent of people say they still support the idea, including one-quarter of Republicans, according to a new poll. [...]

Another proposed idea under ObamaCare - the public option - also retains wide approval.

Only 13 percent of people said they opposed the public option, which would give individuals the choice of buying healthcare through Medicare or private insurers.

Of course health care coverage is a waste of money--at least until you're old--we're generally healthy.  But in developed nations the citizenry considers it a right. 

So there are two ways of approaching the inevitable : (1) we can use HSAs and catastrophic coverage, which guarantees that we are all covered in the unlikely event we need insurance, but also forces us to save money instead of consuming medicine heedlessly; or, (2) we could simply institute National Health, which provides the same peace of mind as universal private coverage.




Posted by at November 8, 2015 8:33 AM

  

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